The vanishing PS3 price drop: soon only one $600 PS3 remains

When all is said and done, Sony will have one PS3 available throughout North …

The Great PS3 Price Drop of 2007 isn't much of a price drop after all, not when Sony's moves are looked at in aggregate. When all is said and done, Sony will have one PS3 available throughout North America, and it will be the upgraded/downgraded 80GB PS3.

Sony surprised everyone with a pre-E3 price cut announcement, announcing both a "new" 80GB unit at $599 and lowering the price of the 60GB PS3 to $499—a savings of $100. The price drops were effective immediately.

As it turns out, Sony is rapidly phasing out the 60GB PlayStation 3 in favor of the 80GB unit and will no longer be manufacturing the newly minted $499 PS3 for the North American market. That $499 price is less a price cut and more a sale tag, in other words. SCEE president David Reeves has told GamesIndustry.biz that he expects the 60GB model of the PS3 to be sold out by the end of this month throughout North America, and Sony won't be making more of them.

Cell, err Shell game

The move is a brilliant one for Sony, for it allows them to streamline their offerings in the US while finally importing the hardware revision Sony is using almost everywhere else. The European PlayStation 3 launch revealed that Sony had removed dedicated hardware aimed at ensuring wide PlayStation 2 backwards compatibility. The new units have software aimed at providing backwards compatibility, which helped Sony cut manufacturing costs. The "downgrade" had been much lamented online, but we heard few reports from gamers who run into compatibility problems, although they are out there.

The upgrade to 80GB of storage offsets some of that potential bitterness, and Sony can pull the switcheroo while still saving plenty of money on manufacturing. According to Reeves, the cost difference stemming from the 60GB to 80GB hard drive upgrade is "just Euro cents" (a.k.a., pennies).

The end result is that it costs less for Sony to make the upgraded 80GB unit than the existing 60GB unit. The Motorstorm bundle might shave a few bucks off those savings, but they're there. Whether or not you see this as brilliant product management or evil trickery will likely depend on how you view Sony, but one thing is clear: if you want dedicated hardware for backwards compatibility support, the 60GB unit is your only option, and supplies are limited.

Update

In the hours since the story broke, Sony has been working hard to assure gamers that the 60GB PS3 isn't about to disappear from store shelves. Sony's senior director of corporate communications David Karraker recently posted a clarification on PlayStation.Blog. "As we announced this week, SCEA’s product offering in North America consists of a 80GB PS3 available in August and a 60GB PS3 available now for $499," wrote Karraker. "We will have ample supplies of both models to meet the needs of consumers for the foreseeable future." (Emphasis ours.)

That highlighted bit is key. The foreseeable future is a different animal from the indefinite future, meaning that the 60GB model is available while it lasts, and that the 80GB model is the future of the PS3 for the reasons outlined above. Kaz Hirai further muddied the waters with a statement to Scandinavian network VGTV: "[Sony doesn't] have a two SKU strategy in the US; we learned very quickly customers respond better to having one SKU than two," Hirai told the network. "We dropped the price on the 60GB model, as you know that model is no longer in production, once it's no longer on store shelves it will just be the $600 SKU."

Ken Fisher
Ken is the founder & Editor-in-Chief of Ars Technica. A veteran of the IT industry and a scholar of antiquity, Ken studies the emergence of intellectual property regimes and their effects on culture and innovation. Emailken@arstechnica.com//Twitter@kenfisher